09/05/2017

PennFuture Statement on Raid of Special Funds as Budget Proposal “Fix”

HARRISBURG, Pa. (Sept. 9, 2017) – A group of State Representatives on Tuesday proposed a short-sighted “fix” for the state budget proposal, in which money from special funds would be shifted to the general fund, with no regard for environmental repercussions or issues that would arise from the move in the future.
 
While Rep. Joe Emrick stated the special funds and accounts proposed to fill the budget gap is effectively known as the “shadow budget,” PennFuture disagrees with this statement.
 
“The budget proposal unveiled today is a classic example of burning your furniture to heat the house.  It does nothing to address the structural deficit or to fund critical needs. Instead of voting for stable and dependable revenue sources, such as a legitimate severance tax on natural gas, the 17 representatives claim to have found $2.4 billion, including $1.3 billion taken from existing special funds,” said PennFuture President and CEO Larry Schweiger.
 
For example, the group of legislators proposes to take $30 million from the Volkswagen Settlement, which was part of a payment for environmental damage caused when the company botched its vehicle diesel emissions. Instead of using that money to mitigate the air pollution caused by the diesel emissions, this proposal would send the settlement to the general fund.
 
In another example, the proposal would move $50 million from the Hazardous Sites Cleanup Fund (HSCF), which includes almost all of the 2015-16 program revenue.  These funds came from transfers from the Capital Stock and Franchise Tax, the Marcellus Legacy fund, as well as cost recovery and other sources.  
 
The Pennsylvania Department of Environmental Protection has about 200 staff positions that are at least partially funded by the HSCF.  In addition, money from this fund also covers cleanup work at superfund sites and other environmental hazards, emergency response expenditures, providing temporary water supplies, and other critical uses. Instead of funding cleanup activities, the money would be moved to the general fund. Similarly, the proposal takes $357 million from the public transportation trust fund, which provides capital funding for public transportation systems across the state.  
 
“It might be possible to fund the state budget for one year by these maneuvers, but with only $145 million in recurring revenue, eventually the reserves run out,” said Rob Altenburg, Director of PennFuture’s Energy Center. “In addition, money accumulates in these funds for a reason. The money taken and shifted from these funds almost always must be repaid with interest. Thus, the state budget deficit will grow even deeper as a result in future years.”
 
Altenburg went on to state that, “We have a structural deficit in Pennsylvania where expenses exceed revenue.  In spite of this deficit, we have an obligation to invest additional resources to ensure programs such as the Department of Environmental Protection have the staff and equipment that is needed to adequately protect the public. This is another gimmick that attempts to balance the budget by sacrificing public health, safety, and environmental protection.  Pennsylvanians deserve responsible governance, not smog and mirrors.”
 
PennFuture is leading the transition to a clean energy economy in Pennsylvania and beyond. We are protecting our air, water and land, and empowering citizens to build sustainable communities for future generations. For more information, visit www.pennfuture.org.
 
Contact: Stephanie Rex        
Director of Communications
Cell: 412.463.2942
rex@pennfuture.org